FOR THE CONSUMER
The FTC's monthly newsletter for the Congressional community
It's the news you - and your constituents - can use.
Volume 5 - Number 3
IN THIS ISSUE
INFORMATION SECURITY. The FTC and CardSystems Solutions have settled charges that CardSystems' failure to take appropriate security measures to protect the sensitive information of tens of millions of consumers was an unfair practice that violated federal law. This is the ninth FTC case targeting companies whose security practices compromised consumers' confidential financial information, the first case the FTC has brought against a credit card processor, and the largest known compromise of financial data to date. According to the FTC, the security breach resulted in millions of dollars in fraudulent purchases. The settlement will require CardSystems (and its successor) to implement a comprehensive information security program and obtain audits by an independent third-party security professional every other year for 20 years. Press release: www.ftc.gov/opa/2006/02/cardsystems_r.htm
GLOBAL MARKETPLACE HEARINGS. The FTC will host hearings in the fall to examine the next generation of consumer issues to emerge in the global marketplace. The hearings will bring together experts from business, government, the technology sector, the advocacy community, academia, and law enforcement to explore how technology, convergence, and the continued globalization of commerce impact consumer protection issues. The hearings will be held at the FTC Conference Center, 601 New Jersey Avenue, NW, Washington, D.C. 20001. Press release: www.ftc.gov/opa/2006/02/globalmarketing.htm
PRETEXTING. In testimony before the Senate Committee on Commerce, Science, and Transportation Subcommittee on Consumer Affairs, Product Safety, and Insurance, the FTC said it is vigorously investigating companies that offer consumer telephone records for sale. According to the testimony, an entire industry has developed to offer purchasers the cellular and land line phone records of third parties. Press release: www.ftc.gov/opa/2006/02/pretexting060208.htm Testimony: www.ftc.gov/os/2006/02/commissiontestimonypretexting060208.pdf
CREDIT REPAIR DESPAIR. The FTC, U.S. Postal Inspection Service (USPIS), and eight state law enforcement agencies have announced "Project Credit Despair", a crackdown on 20 operations that deceptively claim they can remove negative information from consumers’ credit reports – even if that information is accurate and timely. The FTC began coordinating “Project Credit Despair” last year in response to thousands of consumer complaints, which it shared with the USPIS, the State of Louisiana Office of Financial Institutions, and other state law enforcement agencies. The cases involved companies throughout the nation that typically charged hundreds of dollars in advance for their service. According to the FTC, there is nothing that any credit repair firm can do for a consumer for a fee that consumers can't do for themselves at little or no cost. Press release: www.ftc.gov/opa/2006/02/badcreditbgone.htm
PRETEXTING: YOUR PERSONAL INFORMATION REVEALED. Guide to avoiding "pretexting," which occurs when someone lies to get your personal information. 8.5" x 11", 4 pages. www.ftc.gov/bcp/conline/pubs/credit/pretext.htm
CRISIS DE IDENTIDAD...QUE HACER SI LE ROBAN SU IDENTIDAD (Identity Crisis...What to Do If Your Identity is Stolen). Advice on dealing with identity theft. 8.5"x11", 8 pages. www.ftc.gov/bcp/conline/spanish/credit/s-idcrisis.pdf
EFECTOS PERSONALES: QUE HACER SI LE ROBAN SU CARTERA O SU BOLSO (Getting Purse-onal; What To Do If Your Wallet or Purse is Stolen) Provides the steps an individual should take to protect their personal information if their purse or wallet is stolen. 8" x 11", 2 pages. www.ftc.gov/bcp/conline/spanish/alerts/s-getpurse.pdf
; RED FLAGS. The FTC, the Metro New York Better Business Bureau, and the Consumer Affairs Committee of the New York City Bar will present a half-day “back-to-basics” workshop about complying with truth-in-advertising laws. The workshop, entitled Green Lights & Red Flags: FTC-BBB Rules of the Road for Advertisers, will feature a roster of national experts discussing the latest developments in advertising law for business owners, marketing executives, and in-house counsel. The workshop will be held at the New York City Bar Building, 42 West 44th Street in New York, and will run from 8:15 AM to 1:00 PM. The admission fee of $20 ($15 for members of participating organizations) includes continental breakfast and a CD-ROM of all workshop materials. To register, visit www.ftc.gov/nyadseminar.
Gift cards were a popular item during the holiday season: Consumers reportedly bought whopping $18 billion worth of these items from retailers and financial institutions. Some cards can be used only at the retailer’s store locations; others have expiration dates and extra fees for activation, each transaction, inactivity, replacement if lost or stolen, or monthly maintenance. The FTC has these tips for consumers who are getting "carded" :
1. Store cards sold by retailers usually are issued free of charge. But banks often charge a fee to buy their cards. Some bank gift cards come with a Personal Identification Number (PIN) that lets the user withdraw cash from an ATM.
2. Read the fine print before you buy. If you don’t like the terms and conditions, buy elsewhere. Ask about expiration dates and fees, which may appear on the card itself, on the accompanying sleeve or envelope, or on the issuer’s website. If you don’t see terms and conditions, ask.
3. Make sure that whatever the salesperson tells you also appears in writing. If the seller is reluctant to put the terms or conditions in writing — or says it isn’t necessary — shop elsewhere. If the information is separate from the gift card, give it to the recipient to help protect the value of the card. It’s also a good idea to give the recipient the original receipt to verify the card’s purchase in case it's lost or stolen.
4. Consider purchase fees: Is there a fee to buy the card, or activate it? If you buy the card online or on the phone, is there a fee for shipping and handling? Does expedited delivery cost more?
5. Check on purchase exceptions. For example, can the recipient use a store-specific gift card at either the physical store or at the store’s website? Can an “all purpose” card really be used to buy groceries or gasoline?
For tips on how to make the most of gift cards and to learn where to complain if you've had a problem with them, visit: www.ftc.gov/bcp/conline/pubs/alerts/giftcardalrt.htm.
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